The use of currency in the form of paper bills and metal coins remains a fixture of the modem commercial world. While a large portion of commercial transactions make use of non-currency financial instruments such as credit cards, debit cards, checks and the like, the continued extensive use of currency seems assured. The favourable characteristics of currency include convenience, especially for smaller transactions, and anonymity of purchase.
The wide use of metal coins however presents problems for bulk users of coins, such as retail merchants, and also for the suppliers of bulk coins, primarily banks.
For customer convenience, retail merchants generally prefer to maintain an adequate supply of coins at least most of the time. However, the type of currency offered at any given time by their customers is unpredictable and inconsistent. In many cases a series of customers will offer only paper currency, in which case the merchant's coin reserves may be quickly depleted. This can inconvenience subsequent customers. Many merchants would then find it desirable to replenish their coin reserves, and would do so if it could be done quickly, accurately, and conveniently.
At present, the primary source of bulk coins are local bank branches, staffed by tellers. Therefore it becomes necessary to travel to the branch, wait in line, and be served by bank staff. Banks of course are usually only open during regular business hours, whereas many merchants are open evenings and even overnight. Such merchants often have no recourse but to wait until the next day.
Besides merchants, there are always individuals and other organizations that at various times have a need for bulk coins. They too generally have to go to the bank and wait in line. Another example where coins are in high demand are casinos, particularly the slot machines which use a token type metallic coin, generally valued at one dollar. The high volume nature of the slot machines often means that there is a steady stream of customers seeking to purchase tokens in bulk.
For banks, casinos, and other suppliers, providing bulk coins can present complicated management problems that are usually costly and unrewarding. To begin with, the coins themselves are heavy and bulky. Storage and transportation of the coins is therefore complex and costly. As noted, live staff are invariably needed to effect the transaction. This again is costly, and is particularly noteworthy in contrast to the comparative ease and low cost manner by which paper currency is routinely dispensed through automatic teller (ATM) machines. Additionally, due to the commodity-like nature of the matter, the profit margins that can be charged for bulk coin transactions are generally fairly low compared to other financial services. In many cases there is no additional charge as the service is included in the client's regular fees. So the result is that the supplying of bulk coins is generally a problematic business proposition —having cumbersome management issues, high costs, and low returns.
Most of the solutions offered to improve upon this situation involve attempts to build some sort of automatic dispensing machine for coins, similar to the ATM's commonly used to dispense paper currency. It should be noted that for convenience bulk coins are invariably provided in rolls, wrapped in paper or plastic. Thus the dispensing machines typically store a given capacity of coin rolls of different denominations, and attempt to dispense a given selection of coin rolls as required by the customer. This arrangement, if it works, would succeed in removing the need for a permanent staff person to handle every transaction.
In practice there have been problems with the automatic coin dispenser machines provided so far. While the need for a transaction clerk may be removed, there is always a need for regular service to replenish the coin reserves. To minimize this cost a high coin reserve capacity is important. However, most of the machines available to this point have not been constructed to have a high capacity, and have therefore incurred relatively large costs in this regard.
Another problem with the machines available so far is that they usually rely on some sort of mechanical system to grasp and eject each coin roll. These systems are especially prone to jamming and breakdown. This is not surprising, as individual coin rolls are an especially bulky and heavy item to manage, and accordingly present special problems. When there is a breakdown, there is of course the need to send a service person, which adds to costs. Further, until the machine is serviced the unit is not operational.
For example, one machine uses a series of stacked trays to hold the coins. Each tray can only hold only one single-file layer of coin rolls. Accordingly, it takes several stacks of such trays, arranged side-by-side, and a correspondingly large machine, to attain any sort of meaningful overall capacity. There is a solenoid-based dispense mechanism that moves between trays, both vertically and horizontally, to dispense Individual coin rolls as instructed from each denomination. The actual ejection method consists of the solenoid based plunger mechanically pushing the first coin roll in line in the particular tray. Since this system has a mechanical part that positions the dispense mechanism, and another part that ejects a specific coin roll, it is excessively complicated and therefore prone to jamming and breakdown. Another problem is that the machines are slow, being able to dispense only one coin roll from one denomination at a time. Yet another problem is that these machines cannot handle plastic shrink-wrapped coin, since plastic-wrapped coin rolls tend to flex excessively. Accordingly, when contacted by the solenoid based plunger, plastic coin rolls may flex rather than be ejected. Another problem is that the user interfaces of the machines are hard-to-use and complicated, unlike, for example, ATM machines. Additionally, there may be poor integration with the overall financial system of which the machines are a part.
In the absence of any meaningful solution to the problems posed by the automatic coin dispensing machines produced so far, using and providing bulk coins may continue to be a costly and inconvenient proposition.